Local tax revenues up 7 percent

According to Statistics Netherlands survey of local authority budgets, revenues from taxes collected by Dutch municipal and provincial authorities and water boards will rise by 7.1 percent in 2004. Total taxes paid by private households and companies will come to 9.8 billion euro 7.0 billion euro of this will go into the municipal coffers. Taxes collected by provincial authorities and water boards are expected to amount to 1.0 and 1.9 billion euro respectively.

Revenues from provincial taxes will rise by relatively most: 11.5 percent. Water board levies will increase by 6.9 percent and municipal taxes by 6.5 percent.

Sharp rise in provincial taxes

Revenues from the provincial motor vehicle tax will rise by 100 million euro to 946 million euro in 2004. This increase (11.9 percent) is more substantial than in recent years. The increases in North Holland (23 percent), South Holland (19 percent) and Flevoland (17 percent) are particularly strong. In spite of the sharp increase in North Holland this province still has the lowest rate of motor vehicle tax of all provinces. The provinces name the expected increase in spending on roads and public transport as the reason for the increased rates, alongside the growing number of motor vehicles and the increasing average weight of cars.

Higher water board rates

Revenues from taxes imposed by water boards will grow by 6.9 percent in 2004. This is the largest increase in nearly 10 years. The increase is a direct consequence of higher costs of work carried out by the water boards. Relatively much has been invested in the reinforcement of dams and dikes and in water management. This has resulted in increasing capital costs and maintenance costs in subsequent years. A lot of money has been spent on the creation of    water storage areas and polder pumping stations, polder embankments, extra dredging operations and decontamination. Increasing land development requires more pumping equipment, and water quality demands, too, have pushed up costs as waste water and sewage are having to meet stricter standards.

Sufferance tax up

Revenues from municipal taxes will rise by 6.5 percent in 2004. This increase is comparable with recent years. The increase in the main municipal tax, property tax, is the same as in previous years. The proposed changes in property tax (abolition for tenants and a maximum for other property rates) do not seem to have had any effect yet on the rates of this tax.

One exception is sufferance tax, a tax paid for the use of municipal land. Some municipalities expect to increase their revenues by taxing energy and water companies for underground pipes and cables on municipal land. However, as a number of the companies concerned have lodged appeals against these taxes, it is uncertain whether the municipalities will actually receive them.

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